Correction: Midday Update: U.S. Stocks Turn South as Jobs Report Raises Concerns About Economy

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(A previous version of this story provided the wrong figures for the April revised non-farm payrolls figure as well as the wrong figures for the March previously reported non-farm payroll figure in the 2nd paragraph. A corrected version follows:)

U.S. stocks have turned higher and are trimming this morning's losses but remain negative after the disappointing May jobs report raised doubts about the U.S. economy's ability to withstand a rate hike. Banking stocks led decliners as the likelihood dimmed for higher interest rates, followed by losses in the consumer sector amid concerns consumer spending could be hit by slower economic growth. The Dow Jones Industrial Average was down by more than 100 points at the open but has cut its losses by more than half. Accordingly, defensive sectors like telecoms and utilities are outperforming.

The Labor Department said the economy created 38,000 non-farm jobs in May, well below estimates for an increase of 158,000. The economy saw the slowest pace of job growth in more than 5 years. Additionally, April jobs was revised down to just 123,000 from 160,000, and March was revised down to 186,000 from 208,000. Although the jobless rate fell to 4.7% from 5.0%, this was largely blamed on a drop in labor market participation. However, taking into account the 39,000 striking Verizon ( VZ ) employees, non-farm payrolls would have increased by 72,000.

Although remaining economic data was eclipsed by the jobs report, there were some signs of healthy economic growth. The trade deficit widened to $37.4 billion in April, but this was because March was revised down to a deficit of $35.5 billion from $40.4 billion.

April factory orders grew a robust 1.9% while March was revised upward to up 1.7% from up 1.1%.

The pace of growth in the services sector, however, slowed as the Institute for Supply Management non-manufacturing index fell to 52.9 in May from 55.7 the month prior, missing the 55.5 estimates.

European equities were mixed as the U.S. job report permeated overseas markets. The UK's FTSE-100 closed higher, but EU-zone markets were all underwater as a result of losses in the banking sector.

Crude oil was down $0.56 to $48.64 per barrel. Natural gas was up $0.01 to $2.42 per 1 million BTU. Gold was up $28.80 to $1.241.50 an ounce, while silver was up $0.36 to $16.38 an ounce. Copper was up $0.05 to $2.12 per pound.

Among energy ETFs, the United States Oil Fund was up 0.45% to $11.81 with the United States Natural Gas Fund was up 0.41% to $7.28. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 8.17% to 24.63 while SPDR Gold Shares were up 2.34% to $118.38. The iShares Silver Trust was up 2.23% to $15.56.

Here's where the markets stand at mid-day:


NYSE Composite Index was down 47.47 points (-0.45%) to 10,440.12

Dow Jones Industrial Index was down 56.08 points (-0.31%) to 17,785.80

S&P 500 was down 10.27 points (-0.49%) to 2,094.99

Nasdaq Composite Index was down 37.58 (-0.76%) to 4,933.79


FTSE 100 was up 15.29 points (+0.25%) to 6,200.90

DAX was down 109.83 points (-1.07%) to 10,098.45

CAC 40 was down 51.30 points (-0.99%) to 4,421.78

Nikkei 225 was up 79.68 points (+0.48%) to 16,642.23

Hang Seng Index was up 88.02 (+0.42%) to 20,947.24

Shanghai China Composite Index was up 13.45 points (+0.46%) to 2,938.68


NYSE Energy Sector Index was down 62.08 points (-0.60%) to 10,205.58

NYSE Financial Sector Index was down 97.76 points (-1.58%) to 6,094.44

NYSE Healthcare Sector Index was down 44.80 points (-0.36%) to 12,569.09


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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